• Business and corruption

Business and corruption

Issues relating to politics, corruption and corporate social responsibility (CSR) are becoming more important, particularly when viewed in the context of increasing globalisation, international trade and investment, and recent corporate scandals.This paper suggests that each of these three topics provides a unique ‘lens’ through which to understand how multinational enterprises (MNEs) influence and react to dimensions of their global economic and political environments.

The paper explores the commonalities and differences in MNE-societal relations through the “three lenses” of politics, corruption and corporate social responsibility. It notes that research on these three lenses remains under developed, with critical unresolved issues regarding frameworks, measurement, methods and theory. In spite of the emergence of three parallel literatures on these topics, the paper suggests there are substantial benefits associated with integrating these streams of research in terms of enhancing the quality of research on each topic.

The paper argues that integration of the three literatures requires consideration of these issues across many disciplines, including

• business disciplines - strategy, finance, accounting, marketing
• social science disciplines - economics, political science, sociology, psychology, geography
• theoretical and empirical - quantitative or qualitative efforts

In discussing the common themes in the literature on the three lenses, ther paper considers:

• in the context of MNE political strategies-subsidiary, firm, industry and institutional (home and host) level variables
• in the context of corruption - the effects of MNEs on the environment of corruption; the determinants of the experience of and involvement with corruption; MNE strategies for coping with public corruption
• In the context of CSR -the roles of strategy and asymmetric information/transparency in determining the extent to which firms engage in CSR and the returns to this activity.
  

The paper arrives at several conclusions, including:

• the goals and activities of MNEs may come into conflict with local or national requirements or expectations
• relations between international business and local society, by definition, are multi-layered and complex, fraught with potential pitfalls and tensions
• international institutions are pressuring MNEs to adopt harmonised or common standards of conduct in areas such as anti-bribery, taxation, environment, and corporate social responsibility

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